From Central to Local Level: A Case Study of Wage-Setting in the Swedish Automotive Industry

Abstract

A gap in previous literature exists which examines how centrally negotiated agreements are translated into local wage-setting within organisations. This report aims to fill this gap through the case study of wage-setting within 10 medium sized and 1 large sized organisations within the automotive industry in western Sweden. The organisations differentiated their wage-setting between blue and white collar employees and 6 systems were found in total, three for each group of employee. Through the analysis of the data with the help of Townley’s (1995) managing by numbers theory the systems are seen as representation of the relationship between the employer and employee. It was found that the organisations control the blue-collar workers to a greater extent with standardized systems in place and the absence of wage-discussion than white-collar employees. White-collar employees had pure performance-based pay systems in place and partook in wage setting through wage discussions thus supporting previous research that employees which have greater autonomy also had performance-based pay. This report only looks at the translation of the central wages locally, the perspective of the employees regarding the wage-systems are not included and is a suggestions for future research to look at further. Possible areas of future research include how communication between the central level organisations and local organisation works before and after a centrally negotiated agreement. It would also be of interest to see if the findings of this report would be seen if the study was done internationally.